Auto sales up in February, but industry remains cautious

New Delhi, March 9 (IANS) February brought a breather for the country’s struggling auto industry, which witnessed a 15-percent year-on-year jump in passenger vehicle- sales and 45 percent growth in the mid-size segment during the month, according to an industry lobby. The figures released by the Society of Indian Automobile Manufacturers (SIAM) said compact vehicle-sales also went up 21 percent last month.

Auto companies sold 145,019 passenger vehicles in February as against 126,077 in the year-ago period.

Auto market leader Maruti witnessed a 19 percent jump in sales while other leading players Hyundai and Tata reported 45 percent and 5 percent growth, respectively, during the month.

However, the picture was not rosy for the commercial vehicle (CV)-segment, which saw sales plummeting 32 percent. The commercial vehicle makers sold 31,069 units in February as against 45,478 a year earlier, SIAM said.

Tata Motors lost heavily in the CV category with sales slumping about 30 percent.

The figures showed that India’s performance was better than that of the developed world. US auto giant General Motors saw sales plunging 53 percent in February, while Ford and Toyota reported 48 percent and 40 percent fall respectively.

Japan’s Nissan also witnessed sales falling 37 percent the US market.

Despite the surge in sales, industry leaders said the situation was still “challenging”.

“The positive figures this year are due to low sales volumes during the same month last year on account of an imminent budget. This year since consumers were not expecting any major announcements in the interim budget the sentiment was to buy as usual,” SIAM director general Dilip Chenoy told IANS.

He, however, added that the fiscal and monetary measures taken by the government have also played a part in the apparent resurrection of auto sales.

Hyundai, which recorded the highest growth during the period, also remained cautious.

“The overall market situation continues to be challenging and not much should be read into the February growth as last year in February, the budget was to be announced and a substantial amount of sales were deferred till March,” Hyundai senior vice-president of sales Arvind Saxena had stated last week.

“We expect a fairly flat sales growth curve for the industry for the first quarter ending March 2009,” he added.

The commercial vehicle market, which hit rock bottom in January following a 50 percent decline, seemed to remain passive to the government sops with no signs of revving up. Auto makers have sold 342,352 CVs in the first 11 months of 2008-09, down more than 31 percent from the year-ago period.

Chenoy said the impact of incentives has not been significant for the CV industry with the infrastructure not in place and availability of credit still a problem for fleet operators.